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First Solar shares sink on outlook; analysts remain upbeat

December 10, 2015

NEW YORK (AP) — Shares of First Solar Inc. dropped in premarket trading Thursday as investors punished the company over guidance that fell short of some estimates.

Nonetheless, several analysts reaffirmed a positive outlook for the solar energy technology company, citing its potential mix of upcoming projects and the possibility that this initial guidance could get a boost.

First Solar expects profit between $4.00 and $4.50 per share, with analysts polled by Factset expecting $4.30 per share. The Tempe, Arizona-based company expects revenue between $3.9 billion and $4.1 billion, with Factset estimates at just under $4 billion in revenue.

But some analysts expected more, and that appeared to resonate with some traders in the premarket.

The stock dropped $4.86, or 8.3 percent, to $53.99 about an hour before the start of regular trading.

Janney Montgomery analyst Michael Gaugler said he is unsure of why the stock is sinking, but noted that some solar energy stocks are trading to extreme levels and swinging wildly on slight deviations in expectations. Still, he called the downward slide “unwarranted” and reaffirmed a “Buy” rating, saying an upward revision on the guidance wouldn’t be surprising.

Meanwhile, Stifel Nicolaus analyst Sven Eenmaa said the company is strongly positioned within the solar industry and has had several encouraging project wins. He said the current outlook is “somewhat conservative” and reaffirmed a “Buy” rating, adding that the outlook could increase as money comes in from several projects.

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